Correlation Between Agilon Health and Gilead Sciences
Can any of the company-specific risk be diversified away by investing in both Agilon Health and Gilead Sciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agilon Health and Gilead Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between agilon health and Gilead Sciences, you can compare the effects of market volatilities on Agilon Health and Gilead Sciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agilon Health with a short position of Gilead Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilon Health and Gilead Sciences.
Diversification Opportunities for Agilon Health and Gilead Sciences
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agilon and Gilead is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding agilon health and Gilead Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilead Sciences and Agilon Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on agilon health are associated (or correlated) with Gilead Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilead Sciences has no effect on the direction of Agilon Health i.e., Agilon Health and Gilead Sciences go up and down completely randomly.
Pair Corralation between Agilon Health and Gilead Sciences
Considering the 90-day investment horizon agilon health is expected to under-perform the Gilead Sciences. In addition to that, Agilon Health is 5.42 times more volatile than Gilead Sciences. It trades about -0.02 of its total potential returns per unit of risk. Gilead Sciences is currently generating about 0.12 per unit of volatility. If you would invest 8,808 in Gilead Sciences on August 30, 2024 and sell it today you would earn a total of 433.00 from holding Gilead Sciences or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
agilon health vs. Gilead Sciences
Performance |
| Timeline |
| agilon health |
| Gilead Sciences |
Agilon Health and Gilead Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilon Health and Gilead Sciences
The main advantage of trading using opposite Agilon Health and Gilead Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilon Health position performs unexpectedly, Gilead Sciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gilead Sciences will offset losses from the drop in Gilead Sciences' long position.| Agilon Health vs. Humana Inc | Agilon Health vs. Cigna Corp | Agilon Health vs. Elevance Health | Agilon Health vs. Centene Corp |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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